Get Your Taxes Organized For Next Year Now

Tax season has finally come to a close, and we are all ready to stuff all of that paperwork in a file and walk away from it for the coming year.

But if you would like to see ease in your tax year ahead, there are just a few more steps I encourage you to take…

If you are like me, you have just wrapped up a busy week with the Tax Deadline looming, and you have finally sent it off to the IRS with a feeling of relief. There is something so stressful about this time of year – it’s almost like having to go to the DMV. Reluctantly, we submit and somehow fit this extra work in to our busy schedule.

Whether you use an accountant, submit a simple W-2 through an online service, or have a much more complicated situation, I think we can all agree that it is not a very pleasant experience having to gather all of the needed information for processing.

Since I had a rather eventful week of preparing and submitting my own taxes, I thought I would share what I did immediately after to create a seamless experience in the years to come.

Step 1 – Organize All Notes

While it’s still fresh in your mind, jot down any pertinent information that may have been a struggle to find this year, or any helpful tips that you can use as a self-reminder as you move through the process next year. If you had taken notes, re-write them so that they’re legible and make sense in the future. And if you used an online service, make note of your user name & password.

Step 2 – Take Inventory

While I still had everything out on my desk, I took note which information and tools I relied on and then created this list so that I could quickly set myself up next time. You may want to do the same:

Notebook

Pens

Post-its

Calculator

Glasses (I don’t normally wear glasses, but at the end of the day they were a necessity!)

List of Passwords for Software

Manila File Folders

Label-Maker

Calendar/Planner

Mortgage Info

Vehicle Info

Receipts

Business Info

Last year’s Taxes

This year’s Tax file with all paperwork gathered through the year

Notes from last year

Passwords

Step 3 – Get Organized

Pull out all previous years’ worth of your tax filings. If your years are not cut and dry, sort out the paperwork into piles and set anything that doesn’t need to be kept aside (scratch paper, receipts, duplicates, old statements, etc.). Shred anything that does not need to be kept.

Sort out everything you worked on this year and staple it neatly. If you have a Tax Consultant, you probably don’t need to worry about this.

Step 4 – Replace Additional Paperwork

There are times you need to pull resources from other files. For instance, if you needed your registration or info from a refi, you may have had to retrieve those documents during the process. This is the time to return it all to wherever it needs to go so that it doesn’t get lost in the pile and you forget where it went.

Step 5 – Make New Files

Create one file for each year and label it clearly on the tab. It is good to have a single file for each year so that you can quickly reference back to it as needed.

Then, create one additional file for the next Tax Season. When you do this right now, you will have a spot to file items as they come in throughout the year ahead and things won’t get lost or forgotten. This is great for when you discover something is tax-deductible, such as a home improvement or for business receipts.

Step 6 – Purge

Divide your post-tax trash into two piles; garbage and shredding. Then go through all of your files and weed out what needs to be disposed of. This is a great time to also go through old tax files that do not fall within the last 7 years. (Of course, consult with your accountant for the correct timing that works best for your situation).

Add old tax files to your shredding pile. This is also a perfect time to sort and purge out the rest of your filing cabinet.

Step 7 – Add to the Next Year’s File

It is so helpful having a file labelled for the year ahead, because you can leave yourself helpful notes as they come up. You can also write off the tax preparation you just did next year, so place the receipt in the new file.

If you receive refunds, be sure to place copies of the checks or transactions in the file as well.

This is a system that, once set up properly, becomes a blueprint for years to come. As the years go by, it is a flawless effort to keep up and purge year after year.

So now that you are organized for a seamless transaction in the coming year, you may want to print out this list and place it in next year’s file so that you can just open it right up and feel completely organized:

How To Have An Organized Tax Preparation At Home:

Create Space: Clear off your entire work space so that the only items I can see are the things needed for this project. This may mean taking some time out to tidy up my work space & re-home everything else so that you have plenty of space to spread out.

Pull out this year & last year’s tax files.

Cut out distractions so that I can concentrate and get done with this faster.

Place everything in piles:

This year

Last Year

Tools

Notes

Outside temporary docs needed

Shredder

Soothing Music

Set up a reminder in your planner or on your phone with a deadline to complete taxes by a specific date. Even if you owe & want to pay your penalties as late as possible, ease your mind by doing the tough work early and then following through with final arrangements. Your future self will thank you for it!

The more prepared you are now, the easier it will be then. It really is just a few extra steps that will make a world of difference when the stress of tax season looms up once again.

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